DSP Mutual Fund has launched the DSP Nifty Private Bank Index Fund, providing investors with a focused opportunity to invest in India’s private banking sector. The fund replicates the Nifty Private Bank Index, offering exposure to the four largest private banks that constitute approximately 80% of the index. DSP believes the concentration on larger banks provides a distinct advantage, as these institutions benefit from customer trust, economies of scale, and better access to capital, enabling sustained growth.
Over the last two decades, the market share of Indian private banks has doubled, with these institutions maintaining strong balance sheets and profitability. Despite a recent underperformance compared to the broader Nifty 50, current valuations of the sector are below their 10-year average, presenting a potential opportunity for a market recovery.
Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, emphasized, “The concentration of larger banks can drive sustainable growth due to customer trust and operational advantages.” In Guwahati, local investors are increasingly inclined towards financial products like this fund, which target growth sectors. With rising interest in banking stocks, the DSP Nifty Private Bank Index Fund aligns well with the city’s growing investor confidence in targeted market segments. The New Fund Offer (NFO) runs from February 14 to February 28, 2025, offering both lump-sum and SIP investment options.
